“Zillow Group is undergoing a period of transformational innovation, including our new Premier Agent® lead validation and distribution process, Zillow OffersTM, and now mortgage origination, which together will provide more of an end-to-end real estate transaction experience for consumers,” said
Complete financial results can be found in the investor relations section of Zillow Group's website at http://investors.zillowgroup.com/results.cfm.
Third Quarter and Year to Date 2018 Financial Highlights
The following table sets forth our financial highlights for the periods presented (in thousands, unaudited):
|Three Months Ended||2017 to 2018
|Nine Months Ended||2017 to 2018
|Total IMT segment revenue||332,076||281,839||18||%||957,201||794,464||20||%|
|Other Financial Data:|
|Income (loss) before income taxes:|
|Total income (loss) before income taxes||$||(15,192||)||$||9,247||$||(44,876||)||$||(17,204||)|
|Net income (loss)||$||(492||)||$||9,206||$||(22,176||)||$||(17,245||)|
|Adjusted EBITDA (2):|
|Total Adjusted EBITDA||$||66,165||$||70,957||$||168,475||$||165,456|
|Percentage of Revenue:|
|Income (loss) before income taxes:|
|Total income (loss) before income taxes||(4||)%||3||%||(5||)%||(2||)%|
|Net income (loss)||–||%||3||%||(2||)%||(2||)%|
|Total Adjusted EBITDA||19||%||25||%||17||%||21||%|
|(1) Other revenue primarily includes revenue generated by new construction and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals.|
|(2) See below for more information regarding our presentation of Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net income (loss) on a consolidated basis and income (loss) before income taxes for each segment, for each of the periods presented.|
Additional Third Quarter 2018 Highlights
- More than 186 million average monthly unique users accessed
Zillow Groupbrands' mobile apps and websites, an increase of 7% year-over-year. Zillow Groupbrands' mobile apps and websites reached an all-time traffic high of more than 195 million unique users in July 2018.
- Visits to
Zillow Groupbrands' mobile apps and websites Zillow®, Trulia®, StreetEasy® and RealEstate.com increased 13% year-over-year to approximately 1.9 billion.
- Purchased 168 homes and sold 36 homes through Zillow Offers.
- Revenue from Premier Agent advertisers who have been on Zillow Group's platform for more than one year grew 26% compared to the prior year.
- New sales to existing Premier Agent advertisers, or those that were paying advertisers at the beginning of the quarter, accounted for 54% of total bookings.
- Premier Agent advertisers spending more than
$5,000per month grew 31% year-over-year on a total dollar basis and 33% year-over-year in total number.
Business Outlook – Fourth Quarter and Full Year 2018
The following table presents Zillow Group's business outlook for the periods presented (in millions, unaudited):
|Zillow Group Outlook as of
||Three Months Ending
December 31, 2018
|Total IMT segment revenue||to||to|
|Total Adjusted EBITDA||to||to|
|Weighted average shares outstanding — basic||203.0||to||205.0||197.0||to||199.0|
|Weighted average shares outstanding — diluted||212.0||to||214.0||206.0||to||208.0|
Conference Call and Webcast Information
Zillow Group's management will answer questions submitted via Slido, in addition to answering questions from dialed-in participants, during the live conference call. Questions may be submitted at www.slido.com using the event code #ZEarnings.
A link to the live webcast and recorded replay of the conference call will be available on the investor relations section of Zillow Group's website. The live call may also be accessed via phone at (877) 643-7152 toll-free domestically and at (443) 863-7921 internationally.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which involve risks and uncertainties, including, without limitation, statements regarding the acquisition of
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA, on both a consolidated basis and for each segment and including forecasted Adjusted EBITDA, which are non-GAAP financial measures. We have provided a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net income (loss) on a consolidated basis and income (loss) before income taxes for each segment, within this earnings release.
Adjusted EBITDA is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. The exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect impairment costs;
- Adjusted EBITDA does not reflect acquisition-related costs;
- Adjusted EBITDA does not reflect interest expense or other income;
- Adjusted EBITDA does not reflect income taxes; and
- Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and income (loss) before income taxes and our other GAAP results.
Please visit http://investors.zillowgroup.com, www.zillowgroup.com/ir-blog, and www.twitter.com/zillowgroup, where
Zillow, Premier Agent, Mortech, Bridge Interactive, StreetEasy, HotPads, Out East and New Home Feed are registered trademarks of Zillow, Inc. Zillow Offers is a trademark of
The following tables set forth a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net income (loss) on a consolidated basis and income (loss) before income taxes for each segment, for each of the periods presented (in thousands, unaudited):
|Three Months Ended||Three Months Ended|
|September 30, 2018||September 30, 2017|
|Reconciliation of Adjusted EBITDA to Net Income (Loss) and Income (Loss) Before Income Taxes:|
|Net income (loss) (1)||N/A||N/A||$||(492||)||N/A||N/A||$||9,206|
|Income tax (benefit) expense||N/A||N/A||(14,700||)||N/A||N/A||41|
|Income (loss) before income taxes||$||818||$||(16,010||)||$||(15,192||)||$||9,247||$||–||$||9,247|
|Depreciation and amortization expense||23,015||360||23,375||27,419||–||27,419|
|Share-based compensation expense||38,155||3,527||41,682||28,574||–||28,574|
|Nine Months Ended||Nine Months Ended|
|September 30, 2018||September 30, 2017|
|Reconciliation of Adjusted EBITDA to Net Loss and Loss Before Income Taxes:|
|Net loss (1)||N/A||N/A||$||(22,176||)||N/A||N/A||$||(17,245||)|
|Income tax (benefit) expense||N/A||N/A||(22,700||)||N/A||N/A||41|
|Loss before income taxes||$||(9,670||)||$||(35,206||)||$||(44,876||)||$||(17,204||)||$||–||$||(17,204||)|
|Depreciation and amortization expense||75,576||725||76,301||81,576||–||81,576|
|Share-based compensation expense||102,422||8,944||111,366||84,162||–||84,162|
|(1) We use income (loss) before income taxes as our profitability measure in making operating decisions and assessing the performance of our segments, therefore, net income (loss) is calculated and presented only on a consolidated basis within our financial statements.|